Citation Nr: 0119464
Decision Date: 07/27/01 Archive Date: 07/31/01
DOCKET NO. 98-08 974 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Louisville,
Kentucky
THE ISSUE
Whether an apportionment of $90 of the veteran's improved
disability pension should have been awarded on behalf of two
of his children.
WITNESSES AT HEARINGS ON APPEAL
The veteran and his wife
ATTORNEY FOR THE BOARD
R. L. Shaw, Counsel
INTRODUCTION
The veteran had active military service from May 23, until
October 16, 1973 when he was separated from the Naval
Training Center at Great Lakes, Illinois because of a pre-
existing physical disability.
This matter is before the Board of Veterans' Appeals (Board)
because of an appeal by the veteran from a December 1997
special apportionment decision by the Louisville, Kentucky,
Regional Office (RO) of the Department of Veterans Affairs
(VA) which awarded an apportionment of the veteran's pension
benefits in the amount of $90 per month from April 1997, to
the veteran's former spouse on behalf of two of his children
who are in her custody. This is a contested claim and the
former spouse is recognized as the appellee. (That award was
scheduled to be reduced to $45 per month in July 2001, but
that reduction has been questioned. The reduction is not
pertinent to the current appeal; however, it is discussed
below for other reasons.) In July 1997 the veteran testified
at a hearing at the RO. He later testified at a Travel Board
hearing at the RO in November 1998 in connection with his
appeal of the apportionment award. The Board remanded the
appeal to the RO in March 2000 for additional procedural and
evidentiary development, including a field examination.
Thereafter, the RO continued its prior determination awarding
an apportionment on behalf of the children and returned the
case to the Board for further review.
Since the present adjudication could adversely affect the
interests of either the veteran or the children on whose
behalf the apportionment was made, the appeal must be
processed pursuant to regulations applicable to contested
claims. See 38 U.S.C.A. § 7105A (West 1991); 38 C.F.R.
§§ 19.100-102, 20.500-504, 20.713 (2000). In accordance with
the regulatory requirements, the contesting parties, the
veteran and his ex-wife were each furnished a copy of the
original statement of the case. The RO subsequently failed
to furnish the veteran's ex-wife, with a copy of a September
2000 supplemental statement of the case. However, since the
determination herein is unfavorable to the veteran, the
omission did not prejudice her interests.
The veteran has mentioned on various occasions that his son
has special needs as a result of congenital spina bifida. In
February 1998 he submitted a request that the son be declared
a so-called "helpless child" for VA purposes. See
38 U.S.C.A. § 101(4) (West 1991); 38 C.F.R. §§ 3.57, 3.356
(2000) (providing, in pertinent part, that a child of the
veteran may continue to be recognized as a "child" for VA
benefit purposes after reaching the age of 18 if shown to
have been permanently incapable of self-support before
attaining the age of 18). The RO replied that it could not
take action on the request since the son would not turn 18
until July 2001 and advised the veteran to resubmit the claim
about three months before the son's 18th birthday. There is
nothing in the statute or regulations that expressly
precludes a determination as to permanent incapacity for self
support until immediately before the child's 18th birthday,
but even if there were, the time frame cited by the RO for
adjudicating such entitlement has now arrived. The issue of
the son's continued entitlement to recognition as a child of
the veteran after age 18 by virtue of permanent incapacity
for self support has not been developed or certified for
review on appeal and is not before the Board, but the matter
is referred to the RO for appropriate action.
FINDINGS OF FACT
1. The veteran was awarded improved disability pension from
August 1994; the award included dependency allowances for
several children, including the son and daughter who are the
beneficiaries of the apportionment at issue.
2. The veteran was married to the appellee from 1984 to
November 1995; two children, a son and a daughter, were born
to them, and both children now reside with the appellee.
3. The veteran resides with his current spouse, whom he
married in February 1998. He has reported that his income
consists of VA pension and Social Security benefits totaling
under $1,200 and his wife has SSI income of approximately
$500 per month. He reports monthly expenses in excess of
$1,400.
4. His ex-wife resides with a boyfriend, a son by prior
marriage and her two children by the veteran and has a
monthly income of less than $1,800, consisting of various
government benefits for herself and the younger children plus
a contribution from the boyfriend.
5. The apportionment of $90 per month awarded by the RO on
behalf of the two children is less than the amount of
additional benefits included in the veteran's pension award
for two dependent children.
6. Both the veteran and the appellee subsist at the poverty
level. Continuation of the apportionment of $90 will not
significantly increase the veteran's hardship.
CONCLUSION OF LAW
The award of an apportionment of the veteran's improved
disability pension in the amount of $90 per month to the
veteran's former spouse on behalf of their two children was
proper. 38 U.S.C.A. § 5307 (West 1991); 38 C.F.R. §§ 3.450,
3.451 (2000).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
I. Factual Background
Improved disability pension was initially awarded to the
veteran effective September 1, 1987, at a rate that included
additional allowances for five children, including his wife's
son by a former marriage, his son with the appellee, born in
July 1983; and his daughter by the appellee, born in January
1986. Shortly thereafter, an additional dependency award was
made for the appellee.
The currently recognized appellee filed a claim for an
apportionment of the veteran's pension in June 1995, alleging
that the veteran had left her in September 1994. A special
apportionment decision of November 1995 denied the claim, and
she did not appeal. Later that month, the RO amended the
veteran's pension award to remove the appellee and her son as
dependents as of September 1994 on the basis that the veteran
was not making reasonable contributions to their support and
that the step-child relationship between the veteran and her
son no longer existed for VA purposes.
The veteran and the appellee were divorced in November 1995.
The divorce decree incorporated by reference an Agreed
Commissioner's Report binding on the parties which provided,
in pertinent part, that the wife would be awarded the marital
trailer and that the husband would be awarded the land on
which the trailer was located. The wife was entitled to keep
the trailer on the land until the youngest child reached the
age of 18 years or until either the children became
emancipated or did "not stay in school." Joint custody was
provided for their minor children.
The veteran's ex-wife, reapplied for an apportionment in
March 1997 on behalf of two minor children of the veteran in
her custody. In a financial statement received in April
1997, she reported monthly income of $552, consisting of $484
from Supplemental Security Income (SSI) and $68 in food
stamps. She reported that her children received Social
Security benefits of $180 per month and public assistance
benefits of $187 per month. Her son received SSI of $387.
The total monthly income of the children was $754 and the
total family income was $1,306. She had no assets other than
a checking account with a balance of $50. She reported
average monthly expenses totaling $1,468, including $400 for
food, $200 for the phone, $300 for electricity, $150 for
clothes, $30 for water, $20 for trash, $68 for car insurance,
$50 for gas, and $150 for a car payment.
In May 1997, the veteran reported monthly expenses totaling
$1,047.50. The major items reported were $325 for rent, $250
for food, $100 for a car payment, $100 for gas, $100 for
cigarettes and $94 for car insurance. Attached was
documentation of payment of health insurance premiums and of
$100 per month car payments.
The veteran testified at his hearing at the RO in July 1997
that his ex-wife received Social Security benefits for his
two children and her own child from a prior marriage, and
that she drew AFDC (Aid for Dependent Children) checks as
well as SSI benefits. He claimed that her son was 17 years
old and worked several hours per week at a fast-food
restaurant. She also had a boyfriend living with her in the
trailer who was not currently working. He stated that he had
to maintain a residence that was big enough to accommodate
the children during their visits every other weekend, during
the summer and on other occasions such as every other
Thanksgiving and Christmas. He claimed that if he did not
have a vehicle and could not pick the children up for the
visits, he did not get to see them because the ex-wife
refused to bring the children to them or come get them. He
related that his son was paralyzed from his diaphragm down
and had a lot of pressure on his back due to spina bifida.
At his Travel Board hearing, the veteran charged that his ex-
wife was currently in receipt of income from SSI, Social
Security, and AFDC for the children because both parents were
disabled. He claimed that the trailer in which his ex-wife
lived and the land on which it was located were bought by him
with nonmarital funds but that he gave the trailer to her as
part of the divorce agreement. He argued that the divorce
agreement made no provision for allocation of his VA benefits
and thus there should be no apportionment. He claimed that
his ex-wife was living with a boyfriend and her son, B. G.,
both of whom had earned income, the amount of which he did
not know. He claimed that she had no rent, trailer payment
or lot rent to pay and that her only bills for the children
were for electricity, water and groceries. She had medical
cards for the two children which covered their medical
expenses. He currently paid $300 per month out of his own
income from VA and Social Security benefits to live in a
government-subsidized apartment project. He stated that he
made a 200-mile round trip twice per month to pick up the
children, that he had to buy extra food and other products
for the children during their visits and that he had to
maintain a place large enough to take care of them properly.
He also had had to buy a larger vehicle to accommodate his
disabled son's wheelchair. The boyfriend worked in the
construction field and the son worked mainly in fast-food
restaurants.
In May 1998 the veteran submitted documentation showing that
he had remarried in February 1998, together with various
other documents, including an income statement wherein he
stated that his new wife would have income of almost $500 per
month from SSI, during the rest of 1998. His pension award
was increased from March 1, 1998, in part to reflect this
dependency change. (SSI does not count as income for VA
pension benefit purposes.)
Pursuant to the Board's November 1998 remand, the RO
conducted field examinations to obtain information regarding
the current income, expenses and assets of the veteran and
his former spouse and for all individuals residing with them.
With respect to the veteran, the field examiner reported that
the veteran had monthly income of $1,146 consisting of $598
in VA benefits and $548 in Social Security benefits. His
expenses, computed on an average monthly basis, totaled
$1,436 and consisted of $508 for rent, $250 for light and
gas, $23 (approximately) for insurance, $45 for car expenses,
$12 for taxes, $198 for a bank loan, $250 for food, and $150
for miscellaneous expenses. With respect to the appellee,
the field examiner reported that her family income totaled
$1,741 per month, including $512 in SSI, $532 for the son,
$497 for the daughter and $200 from another party, apparently
the boyfriend. An incomplete listing of monthly expenses for
the household totaled $1,051 and consisted of $180 for
utilities, $200 for the telephone, $151 for car insurance,
$200 for food, $50 for taxes, and $270 for a loan payment.
The field examiner added a personal comment to the effect
that both parties "should receive the benefits due to their
financial and living situations."
II. Analysis
The law permits an apportionment of a veteran's compensation
benefits on behalf of his minor child if such child is not in
his custody. 38 U.S.C.A. § 5307 (West 1991). Under VA
regulations, all or any part of a veteran's compensation or
pension may be apportioned if his children are not residing
with him and he is not reasonably discharging his
responsibility for their support. 38 C.F.R. § 3.450(a)
(2000).
VA regulations provide additionally that where hardship is
shown to exist, a special apportionment of compensation may
be made between the veteran and his dependents or surviving
spouse or children on the basis of the facts in the
individual case as long as doing so does not cause undue
hardship to the veteran or other persons in interest. In
determining the basis for a special apportionment,
consideration will be given to such factors as the amount of
VA benefits payable, other resources and income of the
veteran and those dependents on whose behalf apportionment is
claimed, and any special needs of the veteran, his
dependents, and the apportionment claimants. The amount
apportioned should generally be consistent with the total
number of dependents involved. Ordinarily, apportionment of
more than 50 percent of the veteran's benefits constitutes
undue hardship on him or her while apportionment of less than
20 percent of the benefits would not provide a reasonable
amount for any apportionee. 38 C.F.R. § 3.451 (2000).
Under VA regulations, a "child" of the veteran is defined as
a legitimate or illegitimate unmarried person who is under
the age of 18 years; or who, before reaching the age of 18
years, became permanently incapable of self-support; or who,
after reaching the age of 18 years and until completion of
education or training (but not after reaching the age of 23
years), is pursuing a course of instruction at an approved
educational institution. 38 U.S.C.A. § 101(4) (West 1991);
38 C.F.R. § 3.57(a) (2000).
The children for whom an apportionment was made were born to
the veteran and his ex-wife, before their divorce in November
1995. The veteran's pension award previously included
additional allowances for two children from his own prior
marriage and one child from her prior marriage. These
children have all turned 18 and are not shown to have
continued to remain in school, though her son remains a
member of her household.
The RO has justified the granting of an apportionment to the
appellee on behalf of the son and daughter in part, on the
basis that if an apportionment were not made, the required
alternative would be to terminate the VA dependency awards
for the children since the veteran provides no "direct
monetary support" to them, in which case pension would be
paid to the veteran at a lower rate than he now receives
(based on inclusion of two dependency awards but with the
apportionment deducted). However, this analysis is flawed.
The regulation does not require that a veteran make direct
monthly monetary payments as a precondition for a dependency
award, only that he be "reasonably discharging his
responsibility for [his dependents' support]." 38 C.F.R.
§ 3.450(a). The veteran claims that the apportioned funds
would be used for the children's expenses when they visit him
in accordance with the visitation provisions of the divorce
decree. He has further argued that the expenditures for a
larger house and travel to and from the appellee's home are
expenses which should be considered. It is also relevant
that the veteran's ex-wife and his two children reside rent-
free on land owned by the veteran that he could otherwise
rent out or occupy himself. Clearly, the veteran bears
expenses which directly benefit the children and constitute
enough of a reasonable contribution to their support to
permit the pension dependency allowances for them, regardless
of whether or not an apportionment is in place.
The unfortunate reality in this case is that both the
veteran's household and his ex-wife's household subsist at a
level that amounts to poverty. The veteran's income is
limited to VA pension and Social Security benefits. He did
not account for the SSI benefits received by his wife when he
was interviewed by the field examiner, even though that
income would result in his income exceeding his reported
expenses. However, it is SSI (supplemental security income).
The basic purpose of SSI is to assure a minimum level of
income to people who are disabled and have limited income and
resources. It is a program of last resort and is only paid
if it is determined that the individual's other income is
below a very minimal benefit rate. While marriage may reduce
SSI, it does not eliminate it. Social Security Handbook,
11th Ed. §§ 2102, 2117, 2166 (1993). In substance, the very
payment of SSI raises a presumption that the recipient is
living at a poverty level.
The ex-wife, directly or on behalf of their children, also
receives various government benefits, including SSI, and
receives an additional contribution from a boyfriend who
lives in the household but who does not appear to be
regularly employed. Though her household income is somewhat
greater than the veteran's, she must support the veteran's
two children, one of whom has special medical needs, and the
family unit at least partially dependent on that income
contains 5 people. The expenses reported for the wife are
clearly only a partial listing which is limited to certain
recurring items and are clearly very low for five people. In
short, it was the clear conclusion of the Field Examiner that
both households had no income for discretionary spending and
needed all the income they received.
The hardship experienced by both households is of such degree
that continuation of the apportionment is not likely to have
a substantial effect in improving the circumstances of the
veteran's children. Nevertheless, the principle that a
recipient of pension has an obligation to make a reasonable
contribution to the maintenance and upkeep of family members
for whom he is receiving benefits is central to the
regulations controlling the payment of pension. In this
case, the $90 apportionment awarded for the two children
constitutes a large portion of the additional benefits he
receives because of their dependency status. (The additional
improved disability pension allowance for two dependent
children is currently $1,496 per year, or just under $125 per
month. See VA Adjudication Procedures Manual, M21-1 (M21-
1)). It is fair and reasonable for this money to be
allocated for their benefit. Notwithstanding that the
veteran has reported that he incurs additional incidental
expenses associated with their visits, that should not be a
pertinent factor since such visits would not be an essential
expense. M21-1 sets forth guidelines that incorporate this
rationale. See M21-1, Part IV, Change 32, paragraph 19.05(a)
(1993) (if a veteran is receiving additional benefits for
dependents, hardship on the veteran would not result from
apportionment of the additional amounts payable for such
dependents to their custodian.)
It is relevant to note that the disputed apportionment has
been paid to the appellee for many years. If the veteran's
appeal were allowed, an overpayment which would be chargeable
to the appellee would result. She would be obligated to
repay the money out of her own pocket. Even if the Board
agreed with the veteran that the apportionment should not
have been made in the first place, which it does not, the
effect of termination or reduction of the apportionment would
be that repayment would increase the degree of hardship
experienced by the two children and would negate the purpose
for which the apportionment was intended.
In summary, the award of an apportionment in the amount of
$90 per month represents a fair and reasonable allocation of
the veteran's pension in light of the veteran's and his ex-
wife's respective financial needs and expenses.
ORDER
The monthly apportionment in 1997 of $90 of the veteran's
improved disability pension on behalf of his two children was
warranted, and the appeal is denied.
ROBERT D. PHILIPP
Member, Board of Veterans' Appeals